Value Conversations for Product Teams

I first heard the term “value conversation” when working with folks from VeraSage Institute. They are evangelists for value-based pricing to professional services companies. They battle pricing by the hour and advocate for pricing by the job based on the value you deliver. To do that well, you need to have the value conversation with the customer. How much value are you able to deliver?

A little research shows that the “value conversation” is used a lot in other sales situations. Successful salespeople communicate the value of a product in the terms the buyer would use and believe. This is best done by talking to the buyer about how much value he would receive.

Value conversations are great for salespeople. They are even more important for product people. As product people, we have to build and market successful products, and the only way products succeed is if we create and communicate value. Hence, the importance of value conversations.

When defining your next product, of course you need to know what market problems you will solve—but do you know the value of solving them? Not every buyer is identical, but listen to enough buyers and you will get a feeling for the range of values. But the value conversation is not easy. Here’s the wrong way:

Market member: I really need this button to be blue.

Product manager: How much would you pay for that?

Ugh. The market member doesn’t know the answer, and if he did he wouldn’t tell you the truth. A good value conversation would go more like this:

Market member: I really need this button to be blue.

Product manager: What problem would that solve for you?

MM: I have a colorblind employee and he can’t see that button.

PM: Oh, that sounds like a real problem. What happens because he can’t see it?

MM: He sometimes pushes the wrong button, which causes problems in the factory.

PM: Do you mind if I ask what kind of problems?

MM: We start building products we shouldn’t.

PM: That sounds expensive. Do you have any idea how much that cost you last year?

You get the idea. You have to dig to find problems that are quantifiable. Try to turn every feature request into one or more problems that can be quantified using dollars. This is a value conversation.

The same story is true for product marketing. Sure, when you were handed the product someone told you the cool features you should talk about. A more effective technique would be to find real buyers and users and ask them why they bought your product. Can you dig deeper to turn that into dollars? Ask users what having your product actually did for them. Can you dig to turn that one into dollars too?

When we build products that have real value to the market and then learn to market the real value to buyers, our products are amazingly successful. Oh, and sales will love you because you’re helping them with their role too.